National Taxation Bureau of Taipei, Ministry of Finance(NTBT) expressed that, a foreign taxpayer, who has stayed in the territory of the R.O.C. for more than 90 days in a fiscal year and left the territory of the R.O.C. by the end of that year, shall bring his/her own passport, ARC, withholding tax statements, certificate of his/her overseas income, and the airplane ticket purchase confirmation letter of his/her departure trip to file his/her individual income tax return to the jurisdictional tax collection authority(based on the residence address shown on the taxpayer’s ARC on the tax-filing date) and make the full tax payment within 10 days before his/her departure.
NTBT explained that, for example, Mr. Zuzuki, a single 50-year-old Japanese executive working for a multinational corporation, was expatriated and appointed by the parent company to serve as the department manager of the company’s subsidiary located in Taipei, Taiwan for 2 years in April, 2018. However, due to the company’s unexpected human resource policy change and personnel shift, Mr. Zuzuki was transferred back to the company’s headquarter and left Taiwan in Octorber, 2018. Mr. Zuzuki has stayed in Taiwan for 200 days in 2018, and he has received NT$4,000,000 salary income from his employer with the entire amount taxed by using the 18% non-resident’s withholding tax rate, or NT$720,000. Since Mr. Zuzuki has stayed in Taiwan for more than 90 days in that year, he has to file his 2018 individual income tax return and make the full tax payment to NTBT’s Foreign taxpayers’ section in accordance with Paragraph 2, Article 71-1 of the Income Tax Act within 10 days before his departure, and the exemption and standard deduction of his tax return shall be in proportion to the ratio between the number of days of his residing in Taiwan in 2018 and the total number of days of that taxable year as prescribed in Article 17-1 of the same Act. In 2018, personal exemption and standard deduction for a single taxpayer under age 70 are NT$88,000 and NT$120,000 respectively. Therefore, the total exemption and deduction amount applied to Mr. Zuzuki’s tax-filing case shall be NT$113,972. ﹝(NT$88,000 + NT$120,000)*200/365 days﹞ In other words, Mr. Zuzuki’s consolidated gross income NT$4,000,000 shall subtract the above-mentioned prorated personal exemption and standard deduction NT$113,972 and the NT$200,000 special deduction for salary income to generate his net taxable income NT$3,686,028. According to the tax rate table, Mr. Zuzuki’s applicable tax rate is 30%, and his tax payable in 2018 is NT$729,208. Since his employer has withheld NT$720,000 tax for his income, his total tax balance due is NT$9,208.
NTBT reminded that if a foreign taxpayer, derived R.O.C.-sourced income during his/her stay in Taiwan, shall in accordance with the tax regulations file his/her individual income tax return to the competent tax collection authority before his/her departure. In the case of a foreign taxpayer found by the tax collection authority to have income taxable but failed to file an annual income tax return, the tax collection authority will determine the tax payable and impose a fine of no more than 3 times the amount of tax determined as payable. The tax collection authority will also notify the exit/entry control office to deny exit clearance to such a taxpayer in accordance with Paragraph 2, Article 72 of the Income Tax Act.
